oil depletion

In the worst days of the Battle of Britain, military commanders had to balance the need to commit fighter planes to defend the capital against having enough in reserve for later attacks. They had to have accurate information on the resources available, but it was easily obtained by a count that could be checked and double checked.

It is equally important that the world should know what its reserves of oil are because its economy depends heavily on oil-based energy, especially for transport and agriculture, which means food. It also needs to know where the reserves are. But unlike in the Battle of Britain, no one can go out to count the reserves because they lie far underground in geological traps whose precise nature can only be estimated.

The exact size of the reserves of a field will be known only on the day when it is finally abandoned; until then, some measure of uncertainty will always surround the number. We need to understand that uncertainty better, in the same way as we assess the probability of a hurricane striking a particular place at a given time.

For more than 60 years, the Oil & Gas Journal has put out an annual report of the world's reserves based on information provided to it by governments and industry. It has been a valiant effort, having the great merit of consistency. The numbers are widely accepted as a firm basis of what the reserve position is, being reproduced, for example, by British Petroleum Co. plc in its Statistical Review of World Energy...

Published in: Oil and Gas Journal, Volume 95, Issue 14, 7 Apr 1997
Available from: Oil & Gas Journal

Given the importance that oil covers in our lives and the problem of oil depletion the world is facing, it is very important to understand how to move in this game from now on. In this work there is not only the presentation of the actual situation, in terms of projections, market structure, and economies of oil producers (mainly situated in the region of the Persian Gulf), but also the possible explanation of the productive behaviour of OPEC and of its swing producer Saudi-Arabia, the best oil management to conduct from now on, and the possible implications in terms of distribution of power resulting from oil depletion.

My interest in this issue takes form starting from the Hubbert’s curve. I also present models of oil management. Then I analyze the oil market both on the macro and the micro side, and I present the basic consequences a spike in oil prices could have on the exchange rate market. In the second part of the work I focus on Middle Eastern economies’ situation, studying the causes of their lack of growth, and the possibility they seem to have for growing beyond oil. The core part of the work is the one dedicated to the situation the world is facing since the beginning of 2008, when the price of oil reached, and passed, the level of 100$.

I present a personal explanation of the productive behaviour of Saudi Arabia and of the situation of its basins, trying to show the best productive path to follow in order to have a flow of oil available as longer as possible. In my conclusions I present the possible best management for the resource left, I analyze the global scenario that may occur with the actual and forecasted situation of oil, and its political implications.

ORIGINALLY SUBMITTED AS A MASTER’S THESIS TO THE FACULTY OF ECONOMICS OF THE UNIVERSITY OF MODENA AND REGGIO EMILIA (ITALY) ON APRIL 2008.
Copyright ©2008 Veronica Cinti

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Oil is a heavily used natural resource with a limited supply. Russia is one of the largest oil producers and the second largest oil exporting country in the world. Many surrounding countries are dependent on Russian energy. Swedish oil import from Russia has grown from 5% to 35% during 2001-2005.

The fall of the Soviet Union in 1991 caused the Russian oil production to drop by 50%. The production is currently growing again – but how will it develop in the future?

This report studies different scenarios for Russian oil production and export based on three different estimates of how much oil Russia has left today (70, 120 or 170 Gb), combined with estimates about how fast Russia can produce the oil (a depletion rate of 3%, 4.5% or 6%).

In the worst case, Russian oil production and also the oil export will peak very soon or has already done so in 2006. In the best case, a constant export can be held until 2036. It is not likely that the Russian production will increase more than 5-10% over today’s level.

Published in: Uppsala University,
Available from: Global Energy Systems